President Joe Biden signed the bipartisan Ocean Shipping Reform Act, a package designed to bolster the domestic shipping industry. This bill represents the most extensive reform of the shipping industry since 1998, and broadens the regulatory oversight of the Federal Maritime Commission (FMC).
The aim is to increase competition, promote US exports, and lower prices for shipping. The FMC shall be required to issue rules related to certain fee assessments, prohibited practices, and establishment of a shipping registry. In addition, they will be authorized, under certain circumstances, to issue an emergency order requiring common carriers to share information directly with shippers and rail and motor carriers.
Supporters of the legislation (as well as the President) say these alliances have caused a huge spike in shipping prices, and have been a significant factor in surging inflation.
Sixty days after the law takes effect, FMC is scheduled to begin taking public comments seeking to discover if the situation at the ports, railroads and trucking terminals has created an emergency situation.
It must be noted that the bill drew praise from transportation and business leaders. “This bill provides important tools to address unjustified and illegal fees collected from American truckers by the ocean shipping cartel, fees that have contributed to the shipping lines raking in $150 billion in profits just last year. Those fees hurt American motor carriers and consumers, helping to drive record inflation,” said Chris Spear, President of the American Trucking Associations (ATA). David French, of the National Retail Federation (NRF) added “making OSRA federal law helps address long-standing systemic supply chain and port disruption issues.”The timing here as it relates to inflation is crucial as The Federal Reserve (the Fed) took its most aggressive step yet to try to tame rapid inflation, raising interest rates by three-quarters of a percentage point and signaling that it is prepared to inflict economic pain to get prices under control.